Bank Exams Questions

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Deficit spending means spending more than the income getting. A government need to take debts for deficit spending.

There are two payment types that will help you stick to your budget.

1. Cash
2. Debit Card

The amount in the debit card is the only amount you can spend to stay within budget.

These method work because once you spend your money, you are done. You don’t have anything else to spend.

Credit cards, payday loans, and cash advances are all loans on future income. When you use a credit card, there is always just a little bit more you can spend. These types do not help you budget properly. In fact, these types encourage you to spend beyond your means and be out of budget.

Economic resources are those goods and services that can be converted into valuable products for individual and business purposes.

There are four major types of economic resources:

1. land,

2. labor,

3. capital and

4. entrepreneurship.

Land and labor are natural and human resources, while capital means physical resources or money.

Entrepreneurship converts these resources into usable goods.

However, resources have finite values, and proper utilization depends on economic systems and economic decisions.

Monetary policy is the process by which the monetary authority of a country, typically the central bank or currency board, controls either the cost of very short-term borrowing or the monetary base, often targeting an inflation rate or interest rate to ensure price stability and general trust in the currency.

The basic objective of monetary policy is to assist the economy in achieving a full-employment, noninflationary level of total output.

Cause-effect chain: Changes in the money supply affect interest rates, which affect investment spending and therefore aggregate demand.